Monday, September 23, 2013

CONCORD, N.H. — Thousands of New Hampshire Medicaid clients are receiving letters notifying them to pick one of three managed care plans as the state rolls out its managed care system.

If Medicaid clients don't pick a plan, one will automatically be assigned to them beginning Nov. 12. If they aren't happy with their plan, they have 90 days to pick a different one. The plans take effect Dec. 1.

Meridian Health Plan, New Hampshire Healthy Families and Well Sense Health Plan are offering plans. The state is urging Medicaid clients to check to see which of their current medical providers are in a plan if they want to keep using them.

Letters will be sent to reach 120,000 Medicaid clients, Associate Commissioner Mary Ann Cooney said Monday.

New Hampshire is switching from a fee-for-service health care system to managed care to save money and try to provide Medicaid clients with better access to health care, especially those with chronic illnesses such as diabetes.

The three companies offering plans are offering extra benefits as incentives to sign up. Well Sense is offering clients a free dental kit including an electric toothbrush, free car safety seats and booster seats for infants and children and free bike helmets for kids. New Hampshire Health Families and Meridian Health Plan are offering SafeLink cellphones to some. All three offer programs to address obesity.

"Each one of the health plans has certain features that distinguishes it from the others, but overall, clients are going to get the services they've been provided," said Cooney.

A law was passed two years ago to move the state from fee-for-service to a managed care system for Medicaid clients, but efforts to implement the system stalled when health care providers refused to participate due to low state reimbursement levels for treating those patients, among other issues. The budget written by Republicans that same year cut state hospital aid for all but a handful of critical access hospitals. And the 10 largest hospitals sued over Medicaid rates, which complicated efforts to negotiate over managed care.

Lawmakers restored some aid in the budget adopted in June and required hospitals to participate in the managed care system to receive it. Since then, hospitals and other providers have agreed to participate, making it possible for the state to move ahead with its managed care system. The system will be implemented in phases. Switching to managed care is mandatory for most clients during the first phase, which covers medical care, such as doctors.

The developmentally disabled, clients in nursing homes and clients receiving long-term care services will be required to enroll in a plan in about a year during implementation of phase two of the system. Cooney said clients in nursing homes are required to select a plan for the doctors they see outside the nursing home during this enrollment period.

Common Ground will focus on Milwaukee and eastern Wisconsin to start, selling coverage through the federally run online marketplace, or exchange, which opens Oct. 1.

The cooperative does not expect to have the lowest prices. Instead, Chairman Bob Connolly said it hopes to stand out by being a nonprofit run by its members.

"The difference is who we are, what we represent and what we stand for," Connolly said.

The cooperative is being started with up to $56.4 million in loans awarded under the Affordable Care Act. The money will go toward startup costs and meeting state requirements on reserves for insurance companies. It cannot be used for marketing, so the cooperative is relying on volunteers to get the word out by distributing fliers and talking to neighbors.

"How many people do you know that are going door-to-door telling their neighbors about health insurance?" Connolly asked a recent meeting of organizers.

The goal is to sign up 10,000 customers in the first year. Bob De Vita, Common Ground's chief executive officer, estimated the cooperative can break even with 20,000 to 30,000 customers.

Jim Wesp, owner of Kettle Moraine Hardwoods and vice president of Common Ground's board, said he was interested in the idea of a nonprofit because his company and five of its workers are paying about $50,000 a year for health coverage. He also liked the idea of a cooperative.

"As a member, I will have the ability to have some say in how the plan is run," Wesp said.

Common Ground is not the first nonprofit health insurance company in Wisconsin. Group Health Cooperative of South Central Wisconsin was started in the 1970s with a federal loan. It's former director, Larry Zanoni, was an early adviser to Common Ground.

"The best advice he gave us is to be persistent," De Vita said, "because people thought he was crazy."

A Natick man and his Everett business partner scammed more than $27 million from Medicare over six years, federal authorities allege in a sweeping indictment unsealed Friday.

Michael J. Galatis, 62, of Natick, and Janice Troisi, 64, of Everett, owners of At Home VNA of Waltham, are charged with health care fraud, money laundering, conspiracy and aiding and abetting, according to the U.S. District Court indictment.

Galatis was arrested at his home by federal authorities Friday at 6:48 a.m. It was unclear when and where Troisi was arrested.

According to the affidavit, Galatis and Troisi, along with a number of unnamed conspirators, worked together to defraud Medicare. The indictment said company nurses, under the orders of Galatis and Troisi, would run "wellness clinics" at senior housing centers and other types of assisted-living facilities with the goal of finding people on Medicare.

They would then arrange for home health care to be provided by At Home VNA, claiming that the patients were homebound so Medicare would pay. However, according to the indictment, the patients weren’t homebound. The scam began in January 2006 and continued through October 2012.

The indictment alleges that Galatis and Troisi falsified nursing visit reports to make it appear like the patients received skilled nursing services that were not needed or provided.

Galatis and Troisi also "discouraged" visiting nurses from discharging patients, even if the patients requested they stop. They would retaliate against nurses who recommended discharge and transfer the patient to another nurse, the indictment said.

In all, the company scammed millions from Medicare, the indictment said.

"In all, during the course of the conspiracy, AHVNA (At Home VNA) submitted more than $27 million in false and fraudulent home health claims to Medicare," the indictment said.

In addition, the indictment said Galatis laundered nearly $700,000 from his company to his own personal bank account, which he used to buy his home at 25 Indian Rock, Natick, and to pay off the mortgage for the home.

Authorities are looking to seize money in both Galatis' account and At Home VNA, the indictment said.

Both Galatis and Troisi appeared in federal court on Friday. Troisi was released on $25,000 bond. Galatis will be held in custody over the weekend because his $50,000 bond cannot be posted until Monday, a spokeswoman for the U.S. Department of Justice said.

What to know about the case brought by federal and state regulators, as well as Saint Al’s.

By AUDREY DUTTON— adutton@idahostatesman.com

Two of Idaho’s largest health care systems will commence a monthlong battle in federal court this week, with federal and state governments joining Saint Alphonsus Health System in a lawsuit to stop St. Luke’s Health System from owning a large physician practice that used to be independent.

The fight is more than a year in the making. It will determine the future of health care in Canyon County, and it also might be a game-changer for health care in Idaho, where St. Luke’s executives say they plan more growth and consolidation in the name of better health care, healthier people and lower costs.

WHAT CAUSED THIS FIGHT?

Boise-based St. Luke’s has been acquiring physician practices and hospitals for several years. It ramped up its buyouts under the leadership of CEO David Pate, a doctor and lawyer who moved to Boise from Houston four years ago to run the system. The system now includes seven hospitals, more than 70 clinics and medical offices, and about 11,000 employees in Idaho and eastern Oregon. Five years ago, St. Luke’s owned four hospitals and employed about 7,600 people.

But St. Luke’s isn’t being sued over growing too much. Though it is the dominant health care provider in places such as the Magic Valley — where the system’s legal opponents argue its dominance caused a spike in health care prices — its overall growth in recent years is just the background scenery for this lawsuit.

Instead, a single acquisition drew the scrutiny of the Federal Trade Commission and Idaho Attorney General Lawrence Wasden: a buyout of Nampa-based Saltzer Medical Group, which was the largest independent practice in the state.

Both Wasden and the FTC are in charge of enforcing federal and state antitrust laws that protect competition so that consumers can shop around.

Wasden’s office first asked, then warned, both businesses not to close on the deal until the FTC and Wasden had finished investigating whether St. Luke’s was breaking the law. St. Luke’s decided that might take years, so it pressed on.

Saint Alphonsus Health System and Treasure Valley Hospital, a small Boise surgical hospital, sued late last year to stop the Saltzer deal. The St. Luke’s competitors said the buyout would seriously harm their businesses. But Chief District Court Judge B. Lynn Winmill decided to allow the deal to close at the end of 2012, under a few conditions, including that both sides prepare for a full-blown trial.

The FTC and Wasden filed their own lawsuit earlier this year, saying data and paper-trail evidence show that the deal would position St. Luke’s to chip away at competition in Canyon County and to charge health insurers and patients more for services. The two lawsuits were then combined.

Before the lawsuits, Saint Alphonsus — owned by a national Catholic health-care company based in Michigan — made a competing offer to buy Saltzer. Saint Alphonsus now employs some doctors who defected from Saltzer during the negotiations. Saint Alphonsus also has acquired physician practices in recent years, but at a slower rate.

WHAT DO BOTH SIDES HAVE TO PROVE?

The main question is whether St. Luke’s owning Saltzer would substantially reduce competition for primary care in the market Saltzer serves. But there are a few other questions Winmill wants answered.

Where do patients go for health care?

This question is one of the most important, because it’s a sticking point for both sides. To figure out whether a merger is illegal, experts use a formula for how much of a certain “market” each business controls before the merger and after. In St. Luke’s case, the product market is “primary care” and the geographic market is up for debate.

St. Luke’s says Winmill shouldn’t think of Nampa as an island. St. Luke’s says Canyon County residents often make a half-hour drive to Meridian for health care, and patients choose primary-care doctors based on idiosyncratic factors, such as where the patients work.

The opponents say Winmill should ignore that argument, because St. Luke’s hasn’t really defined a better “market” boundary and evidence shows that people in Nampa want health care close to home.

Does St. Luke’s hoard patients by keeping referrals in-house?

St. Luke’s says it encourages doctors to make their own decisions about where they send patients and gives them no reason to keep patients in the St. Luke’s system. The governments and competing hospitals say that’s not what they’ve seen in the data. The competitors say referrals drop when a doctor goes on the St. Luke’s payroll, though the reason for that drop-off is in dispute.

Would St. Luke’s raise prices if it owns Saltzer for good?

Idaho health insurers think it would, according to court documents. The state and federal governments have mined data and found a steep price increase in the Twin Falls area, where they argue that St. Luke’s owns almost the entire market for primary care. Their lawyers say St. Luke’s might reduce competition and raise prices, and that just this possibility is enough to break the law. St. Luke’s attorneys say that if the merger survives, St. Luke’s would lower prices through a contract it penned last year with Utah-based health insurer SelectHealth — a deal that St. Luke’s says can succeed only if it owns plenty of doctors in Nampa.

WHO STANDS TO GAIN FROM THIS? WHAT IS THE PAYOFF?

If St. Luke’s loses, Saint Alphonsus would maintain a larger share of the Nampa market, where it has a hospital and medical plaza. Saint Alphonsus and Treasure Valley Hospital also would keep the patients they think St. Luke’s would siphon away, as well as the money they make from those patients.

If St. Luke’s wins, it will have a foothold in Canyon County, where it currently has no hospital. Its attorneys and executives say it could fully execute a plan to provide lower-cost care by paying doctors for high-quality, efficient work.

For everyone else, what it means is unclear. Both sides argue that if they win, consumers will have lower-cost medical care, Idahoans with Medicaid will have more access to physicians, and people at their organizations won’t lose their jobs.

WHO WILL TESTIFY?

Both sides gave the judge a road map of their arguments, with testimony and evidence they might bring up in the trial.

The people who provide testimony — some of whom will take the stand — include executives and doctors from the two health systems and their hospitals, Saltzer Medical Group, consultants, economists, health care experts, and the directors of the Idaho Department of Health and Welfare and the Idaho Department of Insurance. They also include executives from Blue Cross of Idaho, Regence BlueShield of Idaho and SelectHealth insurance.

St. Luke’s opponents have subpoenaed their first witnesses: Lance Coleman, senior medical director for Blue Cross of Idaho; Jeff Crouch, vice president of provider services for Blue Cross of Idaho; Linda Duer, executive director of the Idaho Physicians Network, a statewide independent health care provider association; Patrick Otte, the vice president of human resources for Micron; and David Peterman, president of Primary Health Medical Group, an independent chain of clinics in the Treasure Valley.